Rural Banking

A vast majority of the Bangladeshis live in the rural areas and their main source of income is agriculture and agro-business. Janata Bank Limited has opened branches in rural areas to cater to the banking needs of rural people. Apart from accepting deposits from the rich and moderately well-off villagers, Janata Bank Limited encourages the poor people to make small savings through different mechanisms.

So far lending in rural areas is concerned, Janata Bank Limited has been financing agricultural production and poverty alleviation programs since 1977. It also lends to the poor landless so that they can make a living. The average loan size is about Taka 20,000.00 (around US$ 285).

1.		Special Agricultural Credit program/ short term crop production loan
2.		Horticulture development (cultivation of banana, betel leaf, pineapple etc.)
3.		Fish/ Shrimp production:-
	(a)	Fishery loan program
	(b)	Credit program for fish cultivator selected by Directorate of Fisheries
	(c)	Shrimp culture credit program
4.		Irrigation and agricultural equipment

	To increase agricultural production and improvement its quality.
	To gear up socio-economic activities among rural people.
	To create employment opportunities among rural people through providing economic support.
	Creating confidence among the beneficiaries on institutional credit and their access to improved production practices / activities.
	To build up asset by creating saving habit among the rural population.
	Poverty reduction.

The main features of the major agricultural / rural credit programmes are narrated below:

1. Special agricultural credit program / Short term crop production loan programme:

01.	Purpose of loan	:	Sanctioning of loan to farmers for crop production.
02.	Area of operation	:	Unions allocated by Bangladesh Bank under Lead Bank System.
03.	Eligibility of loanee	:	Farmer possessing 16¹/₂ - 250 decimals of cultivable land or share croppers.
04.	Sanctioning Authority	:	Branch Manager is sanctioning loan as per credit norms.
05.	Security	:	Crop hypothecation and personal guarantee of the borrowers.
06.	Rate of interest	:	8%.
07.	Duration of loan	:	6 months to 9 months, Maximum 12 months.
08.	Mode of disbursement	:	In cash in a single installment.
09.	Repayment of loan	:	Repayable at a time after harvesting and marketing of crops.

2. Horticulture development loan programme:

01.	Purpose of loan	:	To extend financial help to the farmers who are interested to cultivate betel-leaf, banana, pine apple etc.
02.	Area of operation	:	Allocated unions under Lead Bank System
03.	Eligibility of loanee	:	Genuine farmer.
04.	Sanctioning Authority		Branch Manager is sanctioning loan as per credit norms.
05.	Security	:	Hypothecation of produced crops and personal guarantee.
06.	Rate of interest	:	8%.
07.	Duration of loan	:	Maximum 1¹/₂ year from the date of disbursement.
08.	Mode of disbursement	:	Loan is disbursed in cash in a single or more than one installment.
09.	Repayment of loan	:	Repayable in weekly / monthly / a single installment after crop harvesting and marketing

3 (a). Fishery Loan Programme:

01.	Purpose of loan	:	To increase fish production in pond and to create employment opportunity for pond owners and lease holders by providing credit for pond re-excavation and fish cultivation.
02.	Area of operation	:	Allocated unions under Lead Bank System.
03.	Eligibility of loanee	:	a) Pond owner b) Lease holder of pond.
04.	Security	:	Pond, in case of pond owner and other properties in case of lease holder are being taken as a registered mortgage.
05.	Rate of interest	:	8%.
06.	Duration of loan	:	4¹/₂ years
07.	Mode of disbursement	:	Loan is disbursed in installments.
08.	Repayment of loan	:	Entire amount of loan with interest is repayable by 4 equal installments. First installment is due for recovery after 18 months from the date of disbursement.

3. (b) Credit programme for fish cultivator selected by the Directorate of Fisheries:

Fishery resource is an important sector in our economy. It can play a vital role in creating employment opportunity for reduction of poverty. A memorandum of understanding has been signed between Directorate of fisheries and Janata Bank Limited. As per memorandum bank is financing fish cultivators selected by Directorate of Fisheries. Under this programme, no collateral security is required up to Tk.0.05 million of loan amount.

Purpose of the loan & rate of interest is same as that of fishery loan programme.

3. (c) Shrimp Culture Credit Programme:

01.	Purpose of loan	:	To encourage the shrimp cultivator to produce more shrimps by utilizing modern production practices in order to earn more foreign exchange.
02.	Eligibility of loanee	:	Individual / Group / Cooperative society are eligible for loan.
03.	Security	:	Hypothecation of produced shrimp. Collateral security such as land & building are being taken as a registered mortgage.
04.	Rate of interest	:	8%.
05.	Duration of loan	:	10 months.
06.	Mode of disbursement	:	(a) Loan is disbursed in 2/3 installments from January to March. (b) Cash credit (C/C) is disbursed as per usual practice of bank for the10 (ten) acres of land or above.
07.	Repayment of loan	:	(a) Loan is repaid by 4 equal monthly installments from July to October. (b) Cash credit is adjustable 3(three) times within 1(one) year.

4. Irrigation & Agricultural Equipment Credit Programme.

01.	Purpose of loan	:	Loan is given for the purchase of irrigation equipments i.e Shallow Tube Well (STW), Low Lift Pump(LLP), Deep Tube Well (DTW) etc & Agriculture equipment i.e Tractor, Power Tiller etc. to increase agricultural production.
02.	Area of operation	:	Allocated unions under Lead Bank. System.
03.	Eligibility of loanee	:	Owner of at least 0.5 acre of land in case of irrigation equipment loan and genuine farmer in case of agricultural equipment loan are eligible.
04.	Security	:	a) Hypothecation of equipments purchased by loan money. b) Registered mortgage of land & building which is equivalent to loan amount.
05.	Rate of interest	:	8%
06.	Mode of disbursement	:	Loan is disbursed to the supplier through Pay-order against bill.
07.	Repayment of loan	:	Entire loan amount with interest is repayable by 11 equal half yearly installments within 6(six) years with a grace period of 6(six) months.

Our bank's position on Retail Customer Department-3 (RCD-3) / Retail Customer Department-4 (RCD-4) as on 30-09-2008 is as under :-

No. of Borrowers covered                            : 5,81,801

No. of Branches involved in Micro-credit    : 844

No. of Branches dealing with crop loan       : 555

Range of interest rate                                   : 2% to 14%

No. of Programmes Financed                      : 40

Nos. of Micro-Credit Programes                 : 29

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